Purchasing Home With Girlfriend; Good or Bad?

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Malinois000
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by Malinois000 » Sat Sep 09, 2017 8:29 pm

Bad idea. Fully commit via marriage and purchase condo together, or purchase condo in your name only.

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bottlecap
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by bottlecap » Sat Sep 09, 2017 8:57 pm

Stupendous wrote:
Fri Sep 08, 2017 6:16 pm
A marriage is a contract between 2 people and the government. It isn't a lifetime commitment.
It's funny to me that you don't see marriage as a greater commitment than dating for a few years.

giacomo_bogle
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by giacomo_bogle » Sat Sep 09, 2017 9:49 pm

Do you see each other together long term?
This will answer the question.

PFInterest
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by PFInterest » Sat Sep 09, 2017 10:16 pm

Hold on ...Let me make some popcorn.

ThePrince
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by ThePrince » Sun Sep 10, 2017 9:48 pm

bottlecap wrote:
Sat Sep 09, 2017 8:57 pm
Stupendous wrote:
Fri Sep 08, 2017 6:16 pm
A marriage is a contract between 2 people and the government. It isn't a lifetime commitment.
It's funny to me that you don't see marriage as a greater commitment than dating for a few years.
It's terribly sad, not funny.

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modal
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by modal » Sun Sep 10, 2017 9:52 pm

I'd go with no.

wfrobinette
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by wfrobinette » Mon Sep 11, 2017 12:50 pm

Rupert wrote:
Fri Sep 08, 2017 3:08 pm
Another pitfall is you may have to sell the house in a hurry and at a loss if you break up. I would keep it simple and rent a house together until the ink is dry on the marriage license, then buy.
Seeing how 40% or more marriages end in divorce, I don't think it eliminates the problem just simplifies it because the judge sets the terms.

alter
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by alter » Mon Sep 11, 2017 4:29 pm

I'm going to go against the grain here and say that it can be is a good idea...with some caveats.

I could have done either of the following things 3 years ago:
1. get married and buy house together
2. stay "single" and buy house together

We chose option 2. Financially, it makes more sense to our particular situation. We have lower HSA deductibles because we each have our own policy, and are not over the limit for Roth IRA contributions(which we max), which we could have been if we were married.

Our house appreciated 16k in during this time, and we were able to re-finance at a fixed rate of 2.875% rate(a rate that is much lower than rental prices have been increasing the past few years)

Overall, it made financial sense to buy in our particular situation. Also, we are the type who enjoys a private yard and more room than a rental would provide.

Also, any discussion about whether or not to buy could also be flipped around...with divorce rates so high, are you willing to risk the financial consequences of divorce, all other things being equal?

All in all, it depends on the individuals in the relationship, what type of people they are, etc. Human behavior is something hard to quantify, but if you believe you would separate amicably, don't think you will break up within years, and buy the house in a mutually beneficial way, it can make financial sense. It did in my case.

michaeljc70
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by michaeljc70 » Mon Sep 11, 2017 4:53 pm

alter wrote:
Mon Sep 11, 2017 4:29 pm
I'm going to go against the grain here and say that it can be is a good idea...with some caveats.

I could have done either of the following things 3 years ago:
1. get married and buy house together
2. stay "single" and buy house together

We chose option 2. Financially, it makes more sense to our particular situation. We have lower HSA deductibles because we each have our own policy, and are not over the limit for Roth IRA contributions(which we max), which we could have been if we were married.

Our house appreciated 16k in during this time, and we were able to re-finance at a fixed rate of 2.875% rate(a rate that is much lower than rental prices have been increasing the past few years)

Overall, it made financial sense to buy in our particular situation. Also, we are the type who enjoys a private yard and more room than a rental would provide.

Also, any discussion about whether or not to buy could also be flipped around...with divorce rates so high, are you willing to risk the financial consequences of divorce, all other things being equal?

All in all, it depends on the individuals in the relationship, what type of people they are, etc. Human behavior is something hard to quantify, but if you believe you would separate amicably, don't think you will break up within years, and buy the house in a mutually beneficial way, it can make financial sense. It did in my case.
I agree with most of what you have said. Why wasn't there an option for one to buy and the other pay them rent (or pay for other things)? I guess if you need both incomes to qualify for the mortgage, that would be an issue.

If you get married with a prenup, there shouldn't be many complications in divorce (if you don't have kids).

The main issue I see buying together is if it goes south and one stops paying, the other must pay or their credit will be ruined. Even if you try to sell, the market might not be great and even in a good market it takes time to sell and close. If one wants to sell and the other doesn't, the one that wants to sell will have to sue typically.

You listed financial reasons for not getting married which seem sort of small in my opinion. You are probably paying more for individual policies than if you were on one. If you itemize, who takes the mortgage/property tax deduction? Splitting that rarely makes sense and you cannot file your taxes together. If your combined income puts you over the Roth contribution limit, then $5500 each in a Roth is pretty small compared to your income.

I'd' be very sure of the relationship before buying not being married. Though as you said, every situation is different.

GoldenFinch
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by GoldenFinch » Mon Sep 11, 2017 5:00 pm

ThePrince wrote:
Sat Sep 09, 2017 7:51 pm
bottlecap wrote:
Fri Sep 08, 2017 3:33 pm
You don't know if you are going to get married, so there are three likely outcomes:

1. You get married; or
2. You break up and you hate her; or
3. You break up and she hates you; or
4. You break up and you pine for her; or
5. You break up and she pines for you; or
6. You break up and get along, but no longer want to live with each other.

The only situation that is a good situation is number 1. In all the other situations, owning a house together will be difficult. In many of the other situations, it will be a nightmare.

You are better off waiting until you are committed to each other forever, marriage or not, before setting a course for a likely headache.

Good luck,

JT

+1
I agree with 'Bad.'

This list is the best description of possible outcomes.

thangngo
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by thangngo » Mon Sep 11, 2017 5:03 pm

LeSpy wrote:
Fri Sep 08, 2017 3:03 pm
Hi all,

I am currently unmarried and in a long-term relationship. I live in a condo that I own while she lives with her parents.

I'm not sure if we're going to get married.

She recently mentioned that she would like us to buy a home together.

What are the pitfalls to purchasing a home together with a girlfriend?

Thanks,
It's a good idea if she pays for it while you put your savings in investment accounts. :sharebeer Needless to say, don't let her know about your investment accounts.

MarcVH
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by MarcVH » Mon Sep 11, 2017 6:34 pm

The key question is "why"? Why does your girlfriend want to buy a home together as opposed to numerous other options (she moves in with you, you buy a larger condo and she pays you rent, you move in with her, yada yada)? How would she picture that working; would you each pay half, or what? What if you break up; what would happen? Since this is her idea, it's kind of on her to make a proposal with respect to the details (and if she can't or won't do this, that also tells you something important).

There are a bunch of different aspects of financial merger in a relationship:
  • Co-mingling of finances (e.g. having some joint accounts/assets)
  • Living together
  • Getting married
  • Taking on joint financial responsibilities
  • Purchasing real property together
I purchased a home with my then-girlfriend (now wife), so I'm not going to join the parade of people saying to never do this before marriage. But we had lived together and co-mingled assets for years. You two don't live together and I'm guessing based on that you don't have much if any asset co-mingling. Moreover, if GF lives with her parents then she may not have financial independence or the skills/lessons associated with managing money as an adult.

Jumping straight from "dating while living with mommy and daddy" to "co-owning real property and cohabiting in said property" is a really huge step; I'd see if you can find a smaller one that will allow you both to see how things go and adjust to whatever inevitable friction arises.

alter
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by alter » Mon Sep 11, 2017 6:35 pm

michaeljc70 wrote:
Mon Sep 11, 2017 4:53 pm


I agree with most of what you have said. Why wasn't there an option for one to buy and the other pay them rent (or pay for other things)? I guess if you need both incomes to qualify for the mortgage, that would be an issue.

If you get married with a prenup, there shouldn't be many complications in divorce (if you don't have kids).

The main issue I see buying together is if it goes south and one stops paying, the other must pay or their credit will be ruined. Even if you try to sell, the market might not be great and even in a good market it takes time to sell and close. If one wants to sell and the other doesn't, the one that wants to sell will have to sue typically.

You listed financial reasons for not getting married which seem sort of small in my opinion. You are probably paying more for individual policies than if you were on one. If you itemize, who takes the mortgage/property tax deduction? Splitting that rarely makes sense and you cannot file your taxes together. If your combined income puts you over the Roth contribution limit, then $5500 each in a Roth is pretty small compared to your income.

I'd' be very sure of the relationship before buying not being married. Though as you said, every situation is different.
The whole intent of the thread is financial reasons...it is after all posted in the "Personal Finance" forum, and not the "Romance" one.

My premiums are zero on my HDHP, the company pays it all. It would be far higher if I had the family plan. (and we have no kids, so a family plan doesn't have any advantages, only disadvantages) Also, I prefer if only one of us gets sick that my (80% coverage,etc) benefits start kicking in after paying only 3k in a year rather than having to pay 6k, and vice versa, we prefer separate HSA accounts, our own investments, etc.

She takes the standard deduction, which works well for her. I itemize and take the mortgage, property tax deductions, etc. It really comes out ahead of what it would be to itemize jointly.

OK if you want to compare apples to apples though, you'd have to also ask the question, what would happen if you were married, and one spouse stopped paying, and you divorced. The odds are that case would be more punitive to both parties, as there is more at stake than just a house and both parties often have lawyers involved, litigation, etc. You might conceivably lose the house to the other party altogether, depending on many factors.

Also, if one starts talking about a pre-nup, then one can also just say, have a legal contract written up between the buyers of the house so that in the event of a breakup, its fair.
Last edited by alter on Mon Sep 11, 2017 6:57 pm, edited 4 times in total.

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corner559
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by corner559 » Mon Sep 11, 2017 6:41 pm

This question should get filed under "What on earth are you thinking?"

ABSOLUTELY DO NOT DO IT. PERIOD.

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Raymond
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by Raymond » Mon Sep 11, 2017 6:51 pm

I think the OP isn't going to return to this thread, although he was logged in earlier today :confused
"Ritter, Tod und Teufel"

LeSpy
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by LeSpy » Tue Sep 12, 2017 9:55 am

Thanks everyone for your input. There is a lot more to think about than I at first realized.

I probably won't move forward with purchasing a home together with her, we'll see.

Pobre
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by Pobre » Tue Sep 12, 2017 10:30 am

Bad idea.

Best financial advice I ever received: "Marry well, and marry once."

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Raymond
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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by Raymond » Tue Sep 12, 2017 1:14 pm

LeSpy wrote:
Tue Sep 12, 2017 9:55 am
Thanks everyone for your input. There is a lot more to think about than I at first realized.

I probably won't move forward with purchasing a home together with her, we'll see.
Best wishes to both of you, however it works out :happy
"Ritter, Tod und Teufel"

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Re: Purchasing Home With Girlfriend; Good or Bad?

Post by LadyGeek » Tue Sep 12, 2017 3:37 pm

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